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Economic Ideas Forum, inspiring ideas into policy action: 7 key takeaways

"We have stabilized the Euro and carried out reforms. Now we need to focus on innovation for growth and the digital economy."

These are the words used by Manfred Weber, leader of the European People’s Party (EPP) Group in the European Parliament during his opening of the Economic Ideas Forum that was held in Brussels on December 2nd 2015.

The Economic Ideas Forum (EIF) is an annual high-level conference that brings together economic experts, decision makers and business leaders to discuss and consider innovative ideas and solutions to the economic challenges facing the EU today.  The Forum has so far been a roadshow affair, with previous editions successfully held in Bratislava, Helsinki, Dublin, London and Madrid. Organized by the Wilfried Martens Centre for European Studies, the official think tank of the EPP, the EIF’s aim is to act as a laboratory for policy-oriented ideas.

Here are the seven key takeaways from the one day discussions:

  1. Digital Single Market (DSM): You snooze, you lose

The Commission’s plans for a Digital Single Market featured prominently in the discussion and all speakers agreed that their successful implementation could be agame-changer for the future of the digital economy in Europe. According to one speaker, some EU member states still need to wake up from their “digital snooze”, otherwise the EU will continue to lag behind in digital innovation, most notably in comparison with the US. One big market, rather than 28 different ones will make Europe an investment and digital-friendly continent.

  1. Industry 4.0: Embrace, don’t erase

As the birthplace of the industrial revolution, Europe has long relied on its industrial eco-system as a core economic strength. But the relative contribution of industry to the EU economy is declining. In response, we need to activate a new industrial revolution: we need to transform industrial production through the merging of digital technology, the internet and conventional industry.

In an era where users take the driving seat, and the economy becomes an “on demand” one, including the personalization and digitalization of products, the EU needs to provide a co-ordinated response on how to embed innovation at the core of Europe’s industrial sector.

  1. Collaborative economy: Disrupt yourself

Revolutionising our economies and work habits, that’s no modest ambition set out by the new, dynamic players that are part of the so-called collaborative economy. How about the more traditional players that are challenged in the process? They can use this as an opportunity to disrupt their own business models by adapting and borrowing practices from the newer players. This will lead to growth, lower prices for the consumer and increased efficiency in the utilization of resources.

  1. It’s the (data-driven) economy, stupid!

All the digital innovations discussed raised complex issues of data treatment, storage and protection. There was a general agreement that a balanced deal on data protection is a necessary prerequisite for the digital economy to fully accelerate in Europe. On the issues of data flows and “safe harbor” the temptation to build walls around Europe should be avoided.

  1. Energy Union: Don’t rush to Russia

In the energy field, speakers agreed that the objectives are security of supply, climate protection and the reduction of energy costs. The EU has gone a long way towards having a common policy to achieve these goals, but further steps will still be needed. Tackling the overreliance of some EU countries on external supply (i.e. Russian gas) can be achieved through a better connected European energy market, a stronger energy union and intelligent diversification.

As for the latter, agreement on the importance and role of renewable energy sources was mixed with an acknowledgement that other complementary solutions should also be considered, including nuclear power.

  1. COP21: Leader, not lonely front-runner

With the EIF taking place just before the Climate Change Summit, the timing was right to underline that what was at stake in Paris was the future of Europe as a leader in clean energy. If an agreement was not reached, Europe could turn into a “lonely front-runner”, shouldering a disproportionate part of the burden in fighting climate change and losing its competitiveness to countries with laxer standards.

  1. Ukraine: Remain Calm – now reform and support

The need for diverse and comprehensive reforms in Ukraine was best summarized by a speaker that urged for a “Maidan in government structures”, as well as de-regulation, privatization and an independent judiciary. In this, Ukraine should value the experiences of centre-right reformers from Central and Eastern Europe during the 1990s. In turn, Europe needs to avoid that Ukraine falls off the EU agenda and offer concrete rewards to encourage the reform process in the country, such as the concrete prospect of visa liberalization.

Closing the event, Martens Centre Executive Director Tomi Huhtanen told the audience how, in previous years, “financial crisis” and “economic recovery” were the topics dominating the EIF discussions. This time around, new buzzwords such as “collaborative economy”, “industry 4.0” and “data-driven economy” took over the conversation.

In a world where change seems to happen at an exponentially growing pace, 2016 is no doubt going to bring new, disruptive trends for the European economy. The Martens Centre will be there to discuss them as they happen, with a continued appetite for new ideas and concrete policy recommendations.